GCGC

Presentation

The current trend in bankruptcy legislation is to follow the US model of Chapter 11, whereby the courts have the authority to ‘stay’ the liquidation rights of the secured creditors. The alternative approach of freedom of contracting, whereby the courts limit themselves to strictly enforcing the rights of all parties, is largely ignored, for fear that such a system would be plagued by coordination failures among creditors. We study the resolution of financial distress in shipping, where the ex territorial nature of assets have distanced the industry from on shore bankruptcy legislation.

July 16 2018

This paper examines how audit oversight by a public-sector regulator affects investors’ assessments of reporting credibility. We analyze whether the introduction of the Public Company Accounting Oversight Board (PCAOB) and its inspection regime have strengthened capital- market responses to unexpected earnings releases, as theory predicts when reporting credibility increases.

July 16 2018

Hedge fund activism has recently spiked, almost hyperbolically. No one disputes this, but divergent explanations exist for it. Some see activist hedge funds as the natural champions of dispersed shareholders, who are not economically capable of collective action in their own interest. So viewed, hedge fund activism can bridge the separation of ownership and control. That, however, may assume what is to be proved. Others believe that hedge funds have interests that differ materially from those of other shareholders.

July 16 2018

In this paper we show that dual-class shares can be an answer to agency conflicts rather than a result of agency conflicts. When a firm issues voting shares to raise funds, it increases the risk that manager-controlling shareholder could lose control of the firm and lose the associated private benefits. Thus, the incumbent may be willing to forgo positive NPV investments to maximize his overall welfare.

July 16 2018

This panel discussion focused on corporate governance indices. This topic, being something that finance professors, economists and law professors feel very passionate about, is also something important to practitioners outside of academia.

July 16 2018

Boards are working harder over time, but they may not be working better. Using a comprehensive sample of board data from 1996 to 2010, we document that a large proportion of board activity is carried out by committees. Pre-SOX, 36% of board activity takes place in committees. This increases to 47% post-SOX. Since board activity levels have risen substantially over time, this means more board activity is carried out in the absence of insiders. This change does not appear to be value-enhancing.

July 16 2018

A board gender quota reduces firm value if it forces the appointment of under-qualified female directors. We test this hypothesis using Norway’s 2005 board gender-quota law, which increased the average fraction of female directors from 5% in 2001 to 40% by 2008. Statistically robust analyses of quota- induced shareholder announcement returns, and of long-run stock and accounting performance, fail to reject the hypothesis of a zero valuation effect of this economy-wide shock to board composition and director independence.

July 16 2018

Academics across multiple disciplines and policymakers in multiple institutions have in recent decades searched for the economic, political, and institutional foundations for financial market strength, seeing financial market prowess as propelling economic well-being.

July 16 2018

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